TICK SIZES, STOCK PRICES, AND SHARE TURNOVER: INTERNATIONAL EVIDENCE

We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with hig...

Full description

Saved in:
Bibliographic Details
Published in:Studies in economics and finance (Charlotte, N.C.) N.C.), 2002-02, Vol.20 (2), p.1-18
Main Authors: DYL, EDWARD A., DOUGLAS WITTE, H., GORMAN, LARRY R.
Format: Article
Language:English
Subjects:
Decimalization
Srading volume
Stock price level
Tick size
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.
ISSN:1086-7376
1755-6791
DOI:10.1108/eb028762